'Joint Venture Essay\r'

' pin acts are business games formed by two or more companies to achieve aspecific, but limited, objective. An simulation would be the development of an offshore oil field, where a group of companies combines to build and operate a cut platform and related pipeline. The project is owned evenly by the affiliated enterprises and its management could be chastenled every by one of the partners or by a fork management could be controlled either by one of the partners or by a separate management organisation established just for the project. The venture may be organised as a partnership ,a corporation ,a joint-stock company or roughly other legal form, and it can contunieindefinetly.The rational for a joint venture is usually to diversify lay on the line among the members and or to combine expertise and assets that none of the participants picture alone. : Roy L.Crum,Eugene F.Brigham& joel.F.Houston.(2005)Fundamentals of international finance.1st edn.\r\nTHE ADVANTAGES OF roast VENTURES:\r\n* Access to expertise and contacts in local market places, each partner agrees to ajoint venture to gain access to the other partner’s skills and resources. Typically the international partner contributes financial resources, engine room or products. The local partner provides the skills and knowledge requisite for managing a business in its country.\r\n* Reduced market and political risks\r\n* Economies of scale by pooling skills and resources(resulting in e.g. degrade marketing costs)\r\n* May avoid local tariffs and non-tariffs barriers\r\n* share risk of failure\r\n* Possibly better dealings with national governments through having a local partner.\r\nTHE DISDVANTAGE OF JOINT VENTURES:\r\n* Objectives of the respective partners may be incompatible ,resulting in conflicts\r\n* Contributions to joint ventures can become disproportionate\r\n* Los of control over foreign operations\r\n* Completion cogency overburden a company’s round\r\n* Par tners may become locked into long term investments from which it is tight to withdraw * Cultural differences may result in possible differences in management culture among participating firms * Problems of management structures and dual parent staffing of joint ventures. * canalise pricing problems as good pass amidst partners Sven hollensen.(2004)global marketing(adecision-oriented approach).3rd edn.\r\n'